Wheeler: We Now Return To Our Transition of the Phone System Already In Progress.
Wheeler: We Now Return To Our Transition of the Phone System Already In Progress.
Wheeler: We Now Return To Our Transition of the Phone System Already In Progress.

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    In the last two days, Federal Communications Commission (FCC) Chairman Tom Wheeler has made back-to-back speeches that on their surface appear as dissimilar as could be. First, he gave this speech at the Fall 2014 COMPTEL PLUS show. The next day, he gave this speech at the 32nd Annual Everett Parker Lecture.

    Dig a little deeper, however (and keep in mind what I have previously said about Tom Wheeler signaling what he wants to do), you notice some startling commonalities between these two speeches. Notably, this is the first time Wheeler has brought up the transition of the phone network in a serious way in a long time. And, in both speeches he made it very clear that transition of the phone system to an all-IP platform does not end the FCC’s role.

    To summarize my take-aways:

    1. Wheeler wants to shift the FCC back into working on the IP Transition despite the fact that AT&T is not going to have its pilot project ready until the second half of 2015. It is, after all, the thing he came to the FCC to do in the first place.

    2. While the nature and form of regulation will change, the FCC will continue to play a critical role — throughout the transition —in promoting competition and protecting consumers.

    3. That Network Compact Wheeler keeps talking about? He really means it. When he leaves the FCC, he wants to leave an agency that still protects network users under this fundamental set of values.

    What does this mean for the IP Transition going forward?

    First, consider that Wheeler has not spent much time recently talking about the transition of the phone system. Back when Wheeler came in, and AT&T was pushing hard to get approval to conduct trials to convert an entire wire area to all-IP, we spent a lot of time talking about the future of the IP Transition (now branded the “Technology Transition” by the FCC). But net neutrality, spectrum, and broadband competition have been the dominant themes for some time. We haven’t heard much about the IP Transition since the June Open Meeting– when staff gave the Commission an update on the applications for IP Trials.

    Now, in back-to-back speeches, Wheeler has chosen to highlight the IP Transition and lay down some markers about how the Commission will conduct itself. In both speeches, Wheeler emphasized that those who argue that the IP Transition should result in a deregulated Nirvana need to understand that ain’t gonna happen.

    Wheeler makes clear that much legacy regulation is likely to change, however the goals will remain the same — to actively protect competition where competition exists, to try to promote competition where there is insufficient competition, and to protect consumers even in the presence of competition, because competition does not ensure that consumers are always protected.

    There were few specifics about the plan going forward in the speech, but you can read more about that in the expanded version of this post. So far, though, ILECs (incumbent local exchange carriers) are pushing back. The ILEC trade association, US Telecom, filed a massive Petition for Forbearance to relieve ILECs of most of their responsibilities under the existing rules even before they transition to IP.

    At least the ILECs seem to agree with me that national forbearance for an entire class of carriers is still eminently feasible to grant. As I’ve said before, the fact that the FCC can forbear does not mean that it should forbear, but set that aside for now. Also, in fairness to the ILECs, this document has clearly been in the works since the Chairman’s “Competition” speech last September, and was not designed as a pushback on the Comptel speech. Still, it does demonstrate that ILECs hope to drive the discussion to deregulation — how quickly and how much — rather than a discussion about what responsibilities ILECs will have post transition.

    The Parker Lecture speech, although short on specifics with regard to what initiatives the FCC may focus on for the consumer side, did call out a few specific things. Notably, 911 (which, as this Verge article points out, has developed serious reliability problems), universal access (including serving remote/unprofitable areas and disabilities access), privacy, and truth-in-billing. Odds are good that any action (or set of actions) the FCC undertakes on the IP Transition in the next few months will include at least discussion of these components, and a push for the ILECs to step up and explain how they plan to fulfill these goals going forward.

    I would be utterly remiss if I did not bring up the Public Knowledge #HelpMustCome campaign to fix the problems with wireless 911 geolocation. You can read more about the campaign here and sign the petition to urge the FCC to adopt strong rules here.

    Any bones to the ILECs?

    Keep in mind Wheeler likes to push parties to move off their opening positions and see if they can come to something more agreeable that meets the goals. Wheeler also signaled in both speeches that where more competition exists (e.g., wireless), the FCC will take a less active role (but will still hover around in the background). In the Comptel speech, Wheeler explicitly said he won’t act (or won’t act as aggressively) if he starts seeing ILECs entering into interconnection agreements with CLECs (competitive local exchange carriers) and has some confidence that the industry can work it out on its own.

    So the ILECs have an invitation to come up with transition plans that would still be more voluntary than mandatory and rely pretty heavily on market mechanisms. Wheeler would clearly prefer to do this with a rather bare-bones set of rules mandating a few basic responsibilities (e.g., general duty to interconnect) with the FCC as a backstop to adjudicate disputes rather than maintain existing tariffing requirements and so forth. But Wheeler is also making it clear he won’t shy away from deeper regulation if ILECs won’t come to the table.


    Even though he was vague, I foresee Wheeler returning to the IP Transition and expect more developments on this to percolate over the next month. I continue to believe that the transition of the phone system — on which 96% of Americans still rely — is a pretty big deal, often neglected for what seem flashier and trendier issues. It doesn’t help that because handling the transition involves complicated proceedings and hard decisions, everyone likes to put it off for another day.

    Finally, I want the FCC to make this decision because I believe in the Network Compact. I‘ve pushed the importance for a fundamental framework since we started to get real on the transition almost two years ago. The framework the FCC adopted last January, in a 5-0 bipartisan vote, provides a solid basis for moving the transition forward. Hopefully, after many false starts and interruptions, we will tackle this issue in a real and sustained way that continues to guarantee to all Americans what the Communication Act requires: a reliable, affordable, and ubiquitous way of fulfilling that most basic human need — to talk to each other.

    Stay tuned.


    An extended version of this post was originally posted on Harold Feld's blog, Tales of the Sausage Factory.

    Image credit: ALA Washington Office